Why did Rx drug spending in the US reach an all-time high in 2014?
- U.S. prescription drug sales soared 13% year over year in 2014 to reach an all-time high of $374 billion.
- One reason for the spike, according to the IMS Institute for Healthcare Informatics, is that $11 billion of the spending was allocated to the new oral class of hepatitis C drugs, including Gilead's Sovaldi (sofosbuvir).
- Analysts do not expect this rate of growth to continue in terms of increases in drug spending in perpetuity.
Despite the shocking numbers, the increase in prices should not come as a complete surprise, given the impact that the new hepatitis C drugs have made on the prescribing landscape. With a 12-week price tag of roughly $80,000, Sovaldi in and of itself is a true game-changer. Add to that the impact of high prices from other drugs such as Otsuka's Abilify (aripiprazole) and AbbVie's Humira (adalimumab), and the costs start to add up rapidly.
Overall, new drugs represented $20.3 billion of prescription drug spending in 2014, while multiple sclerosis spending rose 24.4% to $13.9 billion, bolstered by the introduction of new oral treatment options. Surprisingly, however, the implementation of the Affordable Care Act did not have a truly significant impact. In fact, ACA spending only accounted for about $1 billion of the spending increase.
Despite this aggressive increase in prescription drug spending, experts don't see this trend continuing at such an accelerated pace. According to Michael Kleinrock, director of research development at IMS Health, this is most likely going to be a "one-off" situation. In fact, a number of factors will lead to flat growth, including the fact that the sickest people have already taken advantage of the new oral hepatitis C treatment; the impact of payor push-back on high-cost specialty products and the advent of biosimilar treatment options.